Like many investors, the kind of retirement you have may largely depend on how much money you stuff into your 401(k) plan and how well the funds in it perform.

If that’s the case, though, you may want to take a closer look at what those investments are costing you.

The fees associated with 401(k) plans—one of the primary benefits employers offer their employees—can vary widely, and many investors don’t understand just how damaging those expenses can be. Higher fees erode an investor’s returns, putting a dent in a nest egg that gets bigger over time—sometimes significantly so. That means less money when you decide to leave the workforce for good.

Employees of small businesses are particularly vulnerable. While smaller 401(k) plans typically cost more to run, partly because they don’t have economies of scale, a recent report from 401(k) researcher BrightScope expressed “shock” at just how much more expensive smaller plans can be.

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About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits,
Retirement Planning, and Executive Benefits.
Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.